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Engaging consumers through word of mouth marketing

Curriculum Topics
• The marketing function
• Promotional approaches
• Word of mouth (WOM)
• Evaluating promotional
activities

Red Bull Wings Team Red Bull Cliff Diving

Introduction Since then, Red Bull has launched a range of products, including
Red Bull Cola in 2008 and Red Bull Energy Shots in 2009. Today
In today’s society, consumers are bombarded with promotional Red Bull has annual sales of around 4 billion cans in 160 countries.
messages from organisations. Consumers receive these messages It employs more than 7,700 people. Red Bull has a distinctive
when they listen to the radio, watch television, read a newspaper, approach to marketing. It uses a progressive marketing strategy.
commute to work or simply walk around a city centre. Effective This type of strategy aims to constantly evolve and develop the
promotion relies on the message reaching the consumer in an brand. This approach allows Red Bull to engage with consumers
accurate and timely way. However, there are so many messages it using new and exciting channels of communication.
can be difficult for a business to reach its target audience.
In recent years social media has become a vital marketing tool for
Promotional messages can easily become simply noise. They many organisations. Its increasing popularity, predominantly with
crowd the marketplace and make everything more confusing for young audiences, has had a huge impact on modern marketing
consumers. This creates a marketing problem. To address this techniques. Digital and social media campaigns are integral to Red
problem, some marketers look for new ways to communicate with Bull’s marketing strategy. This case study illustrates how Red Bull,
consumers. They seek to break the traditional rules of marketing the manufacturer of the world’s best-selling energy drink, uses a
by reaching consumers in innovative ways. Dietrich Mateschitz range of innovative promotional techniques to improve the process
founded Red Bull in 1984 after discovering the widespread of communication and drive consumer engagement and loyalty.
popularity of tonic drinks in the Far East. He developed the Red Bull
Energy Drink, launching the product on the Austrian market in 1987. The role of the marketing function
To meet the needs of its customers, every organisation seeks a
The Communication Process
distinctive marketing mix. This is often referred to as the 4Ps. It
Noise involves focusing on:
• product – the specific features and benefits of the product
Encoding Message Decoding • place – where and how the product is sold
Sender Receiver
Message Channel Message
• price – setting the right price in each market
Message Channel • promotion – using the most suitable form of promotion to reach
customers.
GLOSSARY

Noise: Barrier or filter to communication Innovative: Tending to devise and/or Marketing mix: The combination of
between the sender and receiver of a adopt novel or breakthrough ideas. product, price, promotion and
message. distribution (place) used to generate
profitable sales – often called the 4Ps.

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For example, the marketing mix for Red Bull Energy Drink is based
around:
• a distinctive product - the taste of the product is unlike any
other, it also has a functional effect in comparison to other soft
drinks
• it is easy to obtain as it is sold in a variety of places - including
retail outlets and food and drink establishments
• Red Bull uses a premium pricing strategy. The product is
priced above that of competitors’ products. Consumers will
pay a premium for Red Bull due to the quality of the product
and the product’s benefits. This is reflected in the fact that it is
the world’s best-selling energy drink.

However, perhaps the most interesting element of Red Bull’s

marketing mix is its approach to promotion. Red Bull embraces
innovation within its promotional activities and as such is able to
create a lasting impression on consumers. The concept behind its
promotional activity is to give people ‘Wiiings’. This translates as
pushing the boundaries of what is possible and nurturing people's
talent so they can achieve their goals and dreams. The aim of the
promotion element of the marketing mix is to grow the business
and increase market share.

Red Bull Flugtag, Leeds 2011

Businesses develop a promotional strategy in order to encourage
customers to purchase their products. Many base their approach
Below-the-line promotions encompass all other forms of
on AIDA principles. AIDA is an acronym that is shorthand for the
promotional activity. To reach targeted groups of consumers,
stages in a sales process.
Red Bull focuses heavily on developing inventive below-the-line
promotions. Unlike many businesses, Red Bull does not use
A awareness – capture the customer’s attention traditional sponsorship as a method of below-the-line promotion.
Red Bull takes a different approach. It creates and organises its
I then stimulate interest
own events around the world. These events provide a platform for
D this creates a desire for the product talented athletes to showcase their skills and ambition. Sporting
A action occurs when the customer purchases the product events include Red Bull X-Fighters and Red Bull Air Race, where
the world’s top FMX riders and pilots respectively perform world
class flips, turns and tricks in front of tens of thousands of
Promotional approaches spectators. These events help to establish the brand values.
They also begin the AIDA process with the participants and
There are several traditional approaches to promotion. Perhaps the audiences for these events, creating awareness and interest in
best known is advertising. This is a key element of what is known as Red Bull products.
above-the-line promotion. This type of promotion usually delivers
messages to a wide audience using the press, television, radio and A key aspect of Red Bull’s promotion is about creating genuine
the internet. Although this makes it easy to reach a large audience, it relationships with individual athletes, such as Robbie Maddison,
is more difficult to deliver a memorable message that is tailored to a who was able to achieve his lifelong ambition when he performed
specific target market. It can be costly: for example, television adverts the first ever motorcycle back-flip over a raised Tower Bridge in
at prime time are very expensive. In addition, businesses cannot London. Through supporting these athletes in pushing themselves
completely control who sees or hears their adverts or how they beyond their limits, Red Bull is able to engage with consumers.
respond. Red Bull’s above-the-line promotion primarily helps to Red Bull events provide experiences that excite, surprise and
increase top of mind brand awareness amongst consumers. challenge participants and spectators.
GLOSSARY

Above-the-line: Promotion through Top of Mind: What is present in the Below-the-line: Indirect sales
advertising on television, radio and the uppermost level of consciousness; the promotions using techniques other than
internet and in the press. manufacturer or brand that people in advertising, such as price promotions
market surveys name first when asked and point-of-sales displays.
to list products in a specific category.

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For example, events in summer 2011 included Red Bull cliff-diving in It helps to generate momentum, through creating interesting
the south of Italy and the Red Bull Flugtag event in Leeds. Red Bull stories for people to talk about, which in turn help to create
Flugtag challenges brave and creative individuals to design, build brand awareness and grow sales.
and pilot their own home-made flying machines off a 30ft-high flight
deck. Almost 100 Red Bull Flugtag events have been held around The founder of Red Bull used pull marketing to promote his
the globe. Teams are judged on the distance flown, as well as the original product in the 1980s. He hired a Red Bull Wings Team to
creativity and originality of their flight machine idea. They also win go out and talk to people one-to-one about the product. This
points for their performance during their pre-flight speech to the helps to create consumer interest in the product. As people
thousands of spectators. experience the drink and appreciate its qualities, they become
advocates for the brand. They share their opinions with other
Events like these support the brand ethos and contribute to the consumers when they talk with friends. The promotion therefore
Red Bull experience. They are based on a belief that mass creates a ripple effect.
awareness can be achieved without requiring big budgets. In
fact, the large-scale activities, such as the Formula 1 team that is Red Bull continues to use this process to reach consumers in
owned by Red Bull, are not the cornerstone of its promotional innovative ways. Initiatives include:
strategy. These activities are focused on building talent and • Red Bull Wings Team – The team of students go out on the
pushing the sport to new levels through innovation. However, the road in their Red Bull mini to help launch the product in new
emphasis is on local activities that can have a big impact and markets. The branded mini has a Red Bull can on the back of
create interesting media coverage. These have the advantage that it. The team offer a cold can of Red Bull to people in need of
the company can quickly and inexpensively change anything that energy to demonstrate the product’s qualities. Through
is not working. It can repeat or develop ideas that work and seem engaging consumers in a fun, non-threatening way they create
to have good public appeal. The programme is managed through a personal and positive product experience. For example, the
an annual activity plan, which is based on a three-year overview Wings Team attended the 2010 London to Brighton mini run.
of promotional work. The team were there for the early start to offer competitors a
cold can of Red Bull.
Word of mouth (WOM) • Student Brand Manager Programme – Individual students help
activate a variety of events on campus. They organise activities
Word of mouth (WOM) promotion is based on the principle of around the UK to get people talking about the product and get
pull marketing. It relies on the transmission of a positive students actively involved on their own university campus.
marketing message from person to person through conversation • Red Bull Bedroom Jam – This is a competition to help teenage
or a personal communication such as email or text message. Pull musicians get out of their bedrooms and onto the big stage,
marketing gets consumers to bring other consumers to the giving them an experience they may never have been able to
product. In contrast, push marketing uses above-the-line have. Red Bull records bands playing live from their bedrooms
promotional techniques to put products in front of consumers in for the world to see via the internet.
order to generate sales.

advertising
Push marketing (above-the-line) consumer
activities

WOM promotions
Pull marketing (below-the-line) consumer
activities

Red Bull extensively uses pull marketing. This approach involves

getting consumers excited about the product and conveying this
excitement to their family and friends. It is also about trying to get
coverage of Red Bull events in the press. This coverage can
encourage consumers to find out more about the product. Red Bull X-Fighters

Brand ethos: The character and values Word of mouth: Communication of a Push marketing: Using above-the-line Brand awareness: Degree of customer
of a brand. promotional message between groups promotions such as advertising to put recognition for a brand.
Mass awareness: Consumers who of consumers. products before consumers in order to Advocates: People who argue in favour
understand the underpinning values Pull marketing: Marketing strategy that generate sales. of another cause, person or point of
associated with the brand. focuses on consumers, encouraging view.
them to come to the product.

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www.redbull.co.uk

• Setting targets for sales returns from the smaller promotional

Red Bull Bedroom Jam
activities.
• Evaluating the amount of editorial coverage its activities receive
in the media.
• Measuring the number of blogs related to Red Bull’s products
and the frequency of comment on these blogs.
• Evaluating the online influence of Red Bull activities in the
social media. For example, on Twitter there are around
260,000 followers of Red Bull activities. On Facebook, more
than 21,000,000 consumers ‘like’ Red Bull.
The bands that create the most attention online then compete • Conducting an annual brand health-check with consumers to
for long-term career support and the opportunity to play at UK ensure that they like the brand.
festivals and be tour support for established musical acts. This
helps create interesting media coverage that gets people talking Measuring the outcomes of Red Bull promotions is not just about
about the brand. return on investment. These figures do not create the whole
• Red Bull Reporter – This project provides opportunities for picture. This is because it can be difficult to value word-of-mouth
aspiring writers, film-makers and presenters to report on world- promotions on paper. Sales returns do not take into account other
class Red Bull events, giving them the chance to have their factors such as longer-term brand loyalty.
work published in a variety of credible publications.
As a specific example, the Red Bull Wings Team has proved to be
These creative and original projects help Red Bull to capture the a very important part of the marketing strategy. When Red Bull
attention of its increasingly knowledgeable audience. They aim to has launched products in countries without this programme as
build brand loyalty by creating relationships with consumers. part of its promotional mix, they have not been received as well
by consumers.
Digital and social media are core elements for all of Red Bull’s
campaigns. These tools provide direct and relevant lines of
Conclusion
communication with Red Bull’s core youth audience. Facebook,
Twitter and online blogs make it easy for people to exchange Red Bull adopts a progressive marketing strategy which is
information quickly between themselves. These channels of constantly evolving to push the brand forward. Social and digital
communication make word-of-mouth and other pull marketing media is at the heart of all of its promotional campaigns. This type
strategies more effective. To remain competitive and interact with of strategy allows Red Bull to adapt its promotional activity to
consumers Red Bull is constantly creating new ways of reaching reflect technological and social changes, for example, the
its audiences online. Red Bull also uses a variety of smart phone increasing use of smart phone applications as a channel of
applications to promote its campaigns. These methods create communication to its audience. Consumers’ expectations are
connections with consumers which minimise the risk of ‘noise’ higher than ever, as such Red Bull strives to use innovative
affecting the promotional message. Unlike advertising campaigns marketing techniques to reach its audience.
which have to be planned months in advance, the great
advantage of some of the techniques that Red Bull uses is that
they are easy to adapt and refine. Red Bull constantly creates new 1.Evaluate how different promotion elements of
methods and techniques to engage with consumers. This is vital the mix can be used to meet current and changing
in such a competitive market. expectations of consumers in today’s
fast-changing society. Discuss each promotional
Evaluating promotional activities
element separately.
For promotions to remain effective, Red Bull has to analyse the 2.Explain how the process of noise can reduce
impact of different campaigns. Word-of-mouth promotions can be the value of promotions within a busy and
more difficult to measure than some traditional methods of promotion. crowded marketplace. Give three examples of
Although healthy sales are an important measure, Red Bull uses other
noise experienced by you as an observer of
measures to evaluate the effectiveness of its activities. For example:
marketing activity.
3.Analyse why pull marketing is better for
Return on investment: Profit over a Promotional mix: The selection of targeting groups of consumers than push
period (usually one year) relative to the methods used by a business to
long-term capital employed. Calculated promote sales of its products, such as
marketing.
as: operating profit/long term capital special offers, tactical price reductions, 4.Can you trace any parallel brand (local or
employed x 100. special displays etc.
international), which also “pushes the
boundaries”? Explain your choice.

Red Bull | Engaging consumers through word of mouth marketing